Origin of Workers’ Compensation Benefits

Workers’ compensation legislation is created to provide benefits, health care, and rehabilitation services to workers who are injured in the workplace. The origin of this type of worker benefit dates back to 1884 with the introduction of a compulsory state-run accident compensation system in Germany. It came into force in Canada with Ontario’s Workers’ Compensation Act in 1914 after extensive research of the German system and related laws in America and other European countries.

The implementation of a workers’ compensation system in Alberta started in 1918. It was intended to address the social and economic injustices resulting from the treatment of injured workers. Workers rarely received compensation because the common law attributed negligence in most cases without holding employers liable.

Guiding Principles of the Workers’ Compensation Act

The workers’ compensation system in Alberta is set out in the Workers’ Compensation Act. The Act is based on the principles of no-fault compensation, security of benefits, independent administration, collective liability, and exclusive jurisdiction.

Amendments to the Act over time have served to strengthen these principles. Since 2017, the following changes have been made to enhance worker protections:

  • Stricter return to work requirements for employers, including the obligation to reinstate workers and continue the provision of benefits
  • Continuation of health benefits
  • Establishment of a Fairness Review Officer
  • Introduction of a Code of Rights and Conduct
  • Coverage of psychological injuries, including Post-Traumatic Stress Disorder, for all occupations
  • Cost-related adjustments, such as benefits based on income, cost-of-living, pension benefit increases for surviving spouses, and deemed earnings
  • Increased focus on a worker-centric system that encourages workers to participate in the health and safety of their workplace. This allows for greater independence, transparency, accountability, and stakeholder engagement.

Scope of Coverage and Protections

Alberta’s Workers’ Compensation Act ensures protection for workers against injuries or diseases arising from their employment, including physical injuries, disabilities, occupational diseases, mental stress or disorder, and chronic pain. The Act covers workers who are injured through a work-related accident and compensates their dependents if the worker dies. Employers, injured workers, health care providers, and the Workers’ Compensation Board of Alberta are all engaged in the process under the Act.

Employers in Alberta are mandated by law to have workers’ compensation coverage for all their workers, regardless of whether they are full, temporary/casual, part-time, unpaid, or contract workers. This coverage also protects the employer from lawsuits by any of the covered workers.

The Workers’ Compensation Board of Alberta (WCB) is appointed by the Lieutenant Governor-in-Council and is responsible for the enforcement of the Workers’ Compensation Act. The WCB’s duties under the Act include:

  • Adjudicating and paying compensation claims to eligible workers
  • Preparing policies and guidelines related to workers’ compensation
  • Overseeing the reintegration and re-employment of workers
  • Collecting employer premiums
  • Setting employer assessment rates
  • Managing investments
  • Providing health and safety education for employers and workers

Where a person contravenes the Workers’ Compensation Act, its regulations, or an order made under the Act, they are guilty of an offence liable to a fine of up to $25,000 (with an additional fine of up to $10,000 for each day the offence continues) and/or six months’ imprisonment.

Workers Not Covered by the Workers’ Compensation Act

As set out in Alberta’s Workers’ Compensation Handbook for Employers, the Workers’ Compensation Act does not cover directors of corporations, proprietors, business owners, partners in a partnership, members of a society, board, authority, commission, or foundation. These individuals need to purchase personal coverage. Additionally, contractors and sub-contractors may not be covered by the employer depending on their status as proprietors or contractors with employees.

Some industries are not compulsorily covered by the Act, such as law firms and financial institutions, but can opt in by applying for coverage to protect themselves from lawsuits arising from work-related injuries. The farming sector in Alberta also does not have mandatory coverage; however, farms and ranches that employ waged, non-family workers are required to have a workers’ compensation board account.

Determining Compensation Under the Act

The Workers’ Compensation Act makes compensation payable to a worker who suffers personal injury by accident at the workplace, or to the dependents of a worker who dies because of a work-related accident. Where an accident disables a worker for all or part of a day, the employer is liable to pay compensation for that day while the Workers’ Compensation Board provides medical aid. If the worker is disabled for longer than a day, the WCB pays compensation for every other workday after the accident.

Injured workers or deceased workers’ dependents are required to report the accident or death within 24 months of its occurrence. Notice must be made to the employer, and, if the worker is disabled beyond a day after the accident, to the Workers’ Compensation Board. Failing to do so may result in a denial of compensation by the WCB, unless there are justifiable and reasonable grounds for not reporting on time.

Contact DBH Law in Calgary for Advice on Workers’ Compensation and Workplace Safety Issues

The lawyers at DBH Law provide advice to both employers and employees on a range of employment-related issues, including workplace safety matters and workers’ compensation benefits. We help draft safe workplace policies and procedures to help employers meet their regulatory and legislative obligations respecting workers’ compensation and occupational health and safety. We also help employees understand their rights and protections under the law.

To find out how we can help you with your employment matter, please contact us at 403-252-9937 or online.